Syllabus: GS-III
Subject: Economy
Topic: Banking and Financial Intermediaries
Issue: Payments Banks
Context: The Reserve Bank of India (RBI) imposed curbs on Paytm Payments Bank Ltd(PPBL).
- PPBL has been barred from.
- Taking further deposits or undertaking credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags.
- Reasons for actions: Persistent non-compliances and continued material supervisory concerns in the bank.
- However, customers are free to withdraw or use their balances in these accounts without restrictions.
- RBI issued orders under Section 35A of the Banking Regulation Act,1949 which gives powers to issue directions on public interest/interest of banking policy.
| Payments Banks:Introduced to promote financial inclusion by offering services to the unbanked and underbanked population, particularly in rural areas.
Features: ● Basic banking services like bill payments, money transfers, mobile banking, and ATM/debit cards. ● Limited deposit amounts: Can accept deposits of up to ₹2 lakh per customer. ● No credit facilities:Cannot offer loans or credit cards. ● Regulation: ○ Registered as a public limited company under the Companies Act, 2013. ○ Regulated under the relevant provisions of the Banking Regulation Act, 1949; RBI Act, 1934 and Payment and Settlement Systems Act, 2007. |
